Lorie Zapf

With state unemployment at a 70-year high and the nation's economy mired in deep recession, some argue that legal reform targeting frivolous lawsuits that border on shakedown schemes could help take the shackles off of many businesses and promote job growth. Union-Tribune editorial writer Chris Reed recently discussed this topic with Lorie Zapf, president of the San Diego chapter of Citizens Against Lawsuit Abuse, on KOGO 600 AM. Here are edited and condensed highlights from the interview:

The cost of litigation is a burden on businesses, but how big of a burden?

A lot of people focus on taxes and regulations, but litigation really sideswipes a business. When I was a small-business owner, I could deal with the taxes and the regulations. They're cumbersome and burdensome. But if you get hit with just one lawsuit, that can just completely cripple your business. Here in San Diego, 93 percent of our businesses are small businesses.

What's being done on this in other states?

In Texas and Mississippi, the legislatures enacted legal reforms. This attracted Toyota to build a $1.2 billion plant in Mississippi. Compare that with what happened in California at Fremont, where Toyota is closing its plant and costing thousands of people their jobs directly and thousands more indirectly. On Texas, Meg Whitman, the Republican candidate for governor, cites an interesting statistic. She says that in 2008, of all the new jobs created in the United States, 52 percent of them were in Texas. Gov. Rick Perry talks about the package of legal reforms Texas passed a few years ago, and now Texas is enjoying the fruit of that. Legal reform does attract businesses.

In the Trevor Law Group case earlier this decade, a Beverly Hills firm sued hundreds of small businesses often run by immigrants with poor English for minor technical infractions. The state attorney general called it an extortion scheme. But the Legislature refused to pass reforms. It took a state initiative, Proposition 64, to block such shakedowns. Does this suggest we'll never see further reforms out of Sacramento?

Propositions are the only way to go. Prop. 64 essentially said you actually have to have a harmed party involved to sue. But people will always think up new and creative ways to sue. There is a whole cottage industry of people like Theodore Pinnock here in San Diego, who threatens businesses with lawsuits because he says they're violating the Americans with Disabilities Act. I get calls from people who say their entire strip malls have been sued.

We've been trying to get that stopped. But when I talked to a legislator about trying to get it fixed, he told me the trial lawyers have so much influence that it's almost impossible to imagine breaking through that. All the reform measures that are introduced go to the committees and die there. They never get out to the floor for a vote. That's why it's so important to know who you're electing and where they stand on these issues and how they will vote.

So you have to go to the people with propositions to get reform.

Is Citizens Against Lawsuit Abuse interested in sponsoring a new initiative? It would require deep pockets.

That's not what we do. What we do is get the word out to the public on how critical it is to get legal reforms to help attract more jobs to California and keeps the ones we have now.

A lot of times small businesses don't get the need for legal reform until it's too late for them. It's like, “Where have you been? What have you done to try to reform the climate so this doesn't happen to you?” People needs to react before the dam breaks.